Biotech Values

[GrthzGd]

The following NABI/BGA.AX story from the Aussies' perspective shows how NABI was able to do some arbitrage of its own:

(Reuters) - Australian flu drug maker Biota Holdings has agreed to take over U.S. firm Nabi Biopharmaceuticals to create a $258 million group and move to the United States, where investors value biotech research more highly than in Australia....

Under the reverse takeover, Nabi will buy all of the shares in Biota for new shares in the name of Biota Pharmaceuticals, which will be listed on the NASDAQ, with existing Biota shareholders owning 74 percent of the merged company and Nabi investors owning 26 percent.

"We believe this is a necessary step to increase our options for the development and commercialisation of our product portfolio and will ultimately improve the recognition of the underlying value of our product portfolio for our shareholders," Biota Chairman Jim Fox said in a statement.

Biota's shares last traded at 96 cents, a fraction of their peak above A$9 hit in 1999 when it won U.S. approval for its first drug, Relenza, an inhaled drug to treat flu. Relenza failed to live up to its promise as it ran into competition from Roche's Tamiflu drug.

Nabi last traded at $1.85 a share. The stock was trading above $5 a share last July before its anti-smoking vaccine trial failed.

Biota receives royalties on Relenza, another flu drug Inavir, and is developing a new generation of flu drug laninamivir, with a pipeline of other research and more than $100 million in cash.

I.e. the NABI management traded a dead-in-the-water biotech with no pipeline for a nice chunk of a foreign company seeking access to US markets and capital.